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Wed 21 Jan 2015

Right to Manage Case Update: Some Pitfalls!!

Right to Manage Case Update: Some Pitfalls!!

The Right to Manage (RTM) is a process available to long leaseholders of flats. The Commonhold and Leasehold Refom Act 2002 (CLRA 2002) created the new right to manage provisions.

Leaseholders can force the landlord to transfer its management functions to a special kind of company called a “RTM company”. The benefits of the RTM are that leaseholders take over the management functions under their leases. However, not all buildings qualify for the right to manage and, whilst the process seems fairly straightforward, there are many pitfalls! The cases of St Stephens Mansions RTM Co Ltd v (1) Fairhold NW Ltd (2) OM Property Management Ltd and (1) Fairhold NW Ltd and (2) OM Property Management Ltd v St James Mansions RTM Co Ltd demonstrate some of the pitfalls.

 

THE CASES: 

These cases concern a development of two adjoining residential blocks of flats, St James Mansions and St Stephens Mansions.

Each RTM company gave a separate Notice Inviting Participation. The landlord’s of both blocks served counter-notice objections to the RTM companies acquiring the right to manage. The RTM companies made applications to the Leasehold Valuation Tribunal (LVT) and the LVT found that the right to manage had been acquired for St James Mansions, but not for St Stephens Mansions.

In the case of St James Mansions, the LVT held a valid counter-notice had not been served as there were errors made in it. In the case of St Stephens Mansions, the LVT found it was not a self- contained part of a building because the water supply to that building was not independent.

Appeals were made on both cases; in the case of St James Mansions the appeal was allowed. It was held that the errors made in the counter-notice were minor, and any reasonable person receiving the notice would have understood this.

In the case of St Stephens Mansions, it was held that the LVT had been correct to conclude the water supply was not independent.

For further details on Right to Manage click here or read our previous newsletter  

If you wish to discuss your leasehold situation, please contact Yashmin Mistry of JPC Law by telephone on 020 7625 4424 or email YMistry@jpclaw.co.uk

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